The Federal Communications Commission’s criticism of the state of broadband deployment Wednesday has sparked concern from telecom giants, who say the agency is sending mixed messages on their performance and could be using a broadband report to advance their move to re-regulate broadband.

In its annual report to Congress assessing whether broadband connections are being delivered to American homes in a “reasonable and timely fashion,” the FCC said 14 to 24 million Americans still lack access to broadband. It was the first time since the agency began its annual report six years ago that it assessed a shortfall by Internet service providers.

The agency also said it increased its definition of high-speed Internet from 200 kilobits per second downstream, a standard set over a decade ago when Web pages were largely text-based, to 4 megabits per second (Mbps) downstream and 1 Mbps upstream. These speeds, however, are still criticized as being too slow compared with those delivered by other nations such as Japan.

“The immediate prospects for deployment to them are bleak,” the agency said.

In its report, the FCC called for that to be corrected by reforming the Universal Service Fund, a phone subsidy program that the agency wants to be used for Internet connections. It also called for “innovative ways” to release new airwaves for mobile broadband.

“The report we release today uses new data and improved analysis to take an honest look at the current state of broadband in America,” FCC Chairman Julius Genachowski said in a statement. “On Congress’s question of universality — whether all Americans are on track to being served — the best available data shows that between 14 and 24 million Americans live in areas where they cannot get broadband.”

Verizon called the report “hard to understand,” given progress in expanding broadband to 95 percent of homes.

Bob Quinn, AT&T’s senior vice president of regulatory affairs, said the agency’s conclusions were “unreasonable." He said it would cost $23.5 billion in federal subsidies to connect 7 million homes with 4 megabit-per-second speed. And he noted that the FCC itself said it is “unlikely that private capital will fund infrastructure capable of delivering broadband that meets the target.”

And he warned that the report shouldn’t be used to push its policy objective on re-regulating broadband.

“To the extent it is used as pretext to justify more investment-choking regulation a la the Title II debate, we will have squandered another opportunity to address the real broadband issues in this country,” Quinn said.

But analyst Paul Gallant of Concept Capital said the report was probably not used to advance the FCC's plan to redefine broadband as a telecommunications service.

"We do not view this upcoming broadband report from the FCC as signaling any change in Chairman Genachowski’s approach to broadband policy," Gallant said. "We believe investors should view it in a larger scope as justifying the various broadband expansion policies laid out in the March 2010 National Broadband Plan."

Millions of people have been waiting over a decade for reliable affordable broadband. If big business refuses, then the government has the responsibility to make it happen. The world runs on the internet. People in foriegn countrys laugh when I say I cant get real broadband where I live. In the United States of America. Funny, we used to be leaders in the world, and now big business wants to siphon off the profits while holding us back as a nation. I would call that very unpatriotic. It appears they would rather America fails than put in a less profitable line somewhere. If they wont do it nationalize them as a matter of homeland security.